HUMAN RESOURCE

INFORMATION SYSTEM (HRIS)

GROUP:

HARSIMRAN JASS

ROSHNI PATEL

VINAYAK KHARE

NITIKA KATARIA

VARUN SEONIE

RAGHAV SARDANA

SHAILENDRA KANDHARI

D 56

D 15

D 48

D 13

D 32

D 28

D 58

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AN INTRODUCTION TO HRIS

Human Resource Information System (HRIS) is a systematic way of storing data and information

for each individual employee to aid planning, decision making, and submitting of returns and

reports to the external agencies. It is an online solution for the data entry and tracking of a

company's human resources department information, payroll, management, and accounting.

A human resource information system (HRIS) is defined as a computer based application for

assembling and processing data related to the human resource management (HRM) function.

As in other types of information systems, an HRIS consists of a database, which contains one or

more files in which the data relevant to the system are maintained, and a database

management system, which provides the means by which users of the system access and utilize

these data. The HRIS thus contains tools that allow users to input new data and edit existing

data; in addition, such programs provide users with the opportunity to select from an array of

predefined reports that may either be printed or displayed on a monitor. Reports may address

any of a number of different HRM issues (e.g. compensation planning, equal employment

opportunity monitoring). HRISs also generally include tools by which users or system

administrators may generate ad hoc reports and select specific cases or subsets of cases for

display.

It merges HRM as a discipline and in particular its basic HR activities and processes with the

information technology field.

It can be used to maintain details such as employee profiles, absence reports, salary

administration and various kinds of reports.

An effective HRIS provides information on just about anything the company needs to track and

analyze about employees, former employees, and applicants.

Thus, in a nutshell, an HRIS system serves the following functions:

Storing information and data for each individual employee.

Providing a basis for planning, decision making, controlling and other human resource functions.

Meeting daily transactional requirement such as marking absent and present and granting leave.

Supplying data and submitting returns to government and other statutory agencies.

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LITERATURE REVIEW

Human Resource Information Systems (HRIS) have become one of the most important tools for

many businesses. Even a small office needs to realize the benefits of using HRIS to be more

efficient. Many firms do not realize how much time and money they are wasting on manual

human resource management (HRM) tasks until they sit down and inventory their time. HRIS is

advancing to become its own information technology (IT) field. It allows companies to cut costs

and offer more information to employees in a faster and more efficient way.

Especially in difficult economic times, it is critical for companies to become more efficient in

every sector of their business.

HRIS refers to software packages that address HR needs with respect to planning, employee

information access, and employer regulatory compliance. The following text begins with a

discussion of human resource planning, followed by human resource management systems.

The HRM field lagged behind a number of other functional areas of management in the

utilization of computer applications, but beginning in the late 1980s extensive use of

sophisticated applications began to appear. Prior to that time, manual record systems often

dominated in personnel or human resource departments. Computer applications used in the

field were generally limited to basic record keeping and payroll management systems. Virtually

all such systems were based on mainframe computers and required extensive support from

information systems professionals. Thus, human resource managers had little opportunity to

design sophisticated reports and computer-based analytical tools to aid in managerial decision

making. In general, uses of computers in HRM fell into the category of electronic data

processing applications, which generally involve the automation of relatively routine tasks (e.g.,

calculating pay and printing checks).

A number of trends seem to have contributed to a growing reliance on computers as

information-processing and decision-aiding tools in HRM. The emergence of the human

resource management field (versus personnel administration) gave the human resource

function greater credibility within the managerial hierarchy, necessitating more sophisticated

use of information, especially as it related to the strategic management function. Firms have

experienced increased competitive pressures that have translated into greater cost

containment demands from upper management, leading to greater automation of the record-

keeping function in the HRM field. The ready availability of microcomputers and relatively

userfriendly software means, that to an increasing extent, human resource managers are no

longer dependent on information system professionals to develop and implement applications

(which might be assigned a lower priority than other management functions). Many HRM

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departments in larger organizations have also developed internal information system

capabilities, so that HRIS units have been established.

Perhaps the most significant development in the HRIS area currently is the growing use

of organizational intranets as a means of managing many aspects of a firm's HRIS. An

intranet is an internal network that makes use of World Wide Web technology

(browsers, servers, etc.) to gather and disseminate information within the firm.

Intranets may be linked to the external Internet, but are usually secured in a variety of

ways so that only authorized users can access the information on the internal

components. While it is quite easy to generate static extracts of HRIS data tables,

queries, forms, and reports for posting on an intranet, it is also quite feasible to

establish live links between an intranet and a firm's HRIS. This allows real-time collection

and display of information. Thus employees can complete forms online that enroll them

in benefits programs, allow them to bid on job openings, let them submit suggestions,

and facilitate filing of various claims. In addition, intranet displays can be tailored to the

needs of specific users. The user may check on the current status of his or her fringe

benefits, vacation time, training program enrollment, or pension fund. Intranets

obviously require extensive security measures to prevent inappropriate changing or

accessing of data. The issues seem to have been addressed, however, and HRIS products

are increasingly emphasizing their functionality in intranet environments.

Another variant is the extranet. Again, relying on World Wide Web technology, such

systems allow organizations to interact with clients in a secure environment that mimics

the Internet. Thus a health insurance company might establish an extranet that links to

the intranets of its major clients. Employees in client organizations can then connect to

the insurance vendor's extranet from within the employer's intranet environment in

order to check on the status of their policies, obtain coverage information, file claims,

and follow-up on outstanding claims.

Human resources operations challenge organizations with a dualistic yet interdependent set of

outcomes. One summons organizational change that may be perceived as a threat to the status

quo, while the other set of outcomes gives highly valuable potential benefits for organizational

performance. This paradox stems from the requirement for U.S. businesses to improve

productivity from their skilled workers in order to satisfy the demand shift from manufacturing

to technological and intellectual innovations (Cascio, 1998; Robbins, 1998). This transformation

means that both organizational productivity gains and competitive advantage depend on high

quality worker competence. In other words, increasing productivity through people is now

paramount. Consequently, essential human resource functions have recently become even

more critical to general organizational well-being.

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To achieve these complex objectives, many organizations have turned to information systems

technology (Haines, & Petit, 1997; Richards-Carpenter, 1997; Simon, & Werner, 1996). The

reliance on technology has deceptively been prompting the false assumption that HRIS is

synonymous with computerized human resource information systems. In reality, computer

technology is not required for a successful HRIS function, and many HRIS activities still defy

computer automation (Grossman, & Magnus, 1988; Haines, & Petit, 1997; Simon, & Werner,

1996). Nevertheless, computer based information technology serves as a tremendous tool for

operationalizing HRIS applications. Many related tasks such as rapid information dissemination

and feedback would be impractical or impossible without computerized support (Benjamin, &

Benson, 1986; DeSanctis, 1986; Haines, & Petit, 1997).

With this major charge, information systems technology has introduced wide spread

implementation of human resource information systems that more fully allow organizational

members to participate in information sharing and decision-making. Indeed, past studies have

shown that over 90 percent of organizations have a formalized and separate HRIS department

or an equivalent function (Cholak, & Simon, 1991; Richards-Carpenter, 1997). Nearly all

organizations have actually implemented some form of HRIS Anonymous, 1996; Richards-

Carpenter, 1997). However, these applications vary widely from organization to organization,

and there is equal diversity in the resultant benefits (Cholak, & Simon, 1991; Haines, & Petit,

1997; Richard-Carpenter, 1997).

Preliminary research shows that successful HRIS operations are identified by such outcomes as

organizational competence; i.e, meeting strategic goals (Thomas, 2001; Pierce, & Newstrom,

2002). Furthermore, successful HRIS functions support such key processes as executive

decision-making, employee training, technology selection, interdepartmental integration, and

organizational reporting structures (DeSanctis, 1986; Haines, & Petit, 1997; Richards-Carpenter,

1996). While such studies provide valuable insights into HRIS implementation, their

generalizability is limited due to the absence of a comprehensive foundation in which to

contextually base these findings (Kovach, & Kathcart, 1999; Kuhn, 1996; Weick, 1979).

All indications are that HRISs will continue to play an increasingly important role in the HRM

field. An important driving factor is that HRISs facilitate process reengineering in the HRM area,

thus promoting greater efficiency. Functions that, once, were carried out manually and in many

steps can often be largely automated. And the business firm's continuing demand for

information to facilitate planning and strategy formulation will necessitate further reliance on

HRISs. Finally, the linking of HRISs to organizational intranets is apt to gain in popularity as a

relatively inexpensive and appealing means of gathering and distributing human resource

information.

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PROCESS OF HRIS

Step 1. Inception of idea: The idea for having an HRIS must

originate somewhere. The originator of the idea should

prepare a preliminary report showing the need for an HRIS

and what it can do for the organizations.

Step 2. Feasibility study: Feasibility study evaluates the

present system and details the benefits of an HRIS. It

evaluates the costs and benefits of an HRIS.

Step 3. Selecting a project Team: Once the feasibility study

has been accepted and the resources allocated, a project

team should be selected. The project team should consist

of HR representatives who are knowledgeable about the

organization’s HR functions and activities and about the

organization itself and representatives from both

management information systems and payroll. As the

project progress, additional clerical people from the HR

department will be needed to be added.

Step 4. Defining the requirements: A statement of

requirements specifies in details exactly what the HRIS will

do. A large part of the statement of requirements specifies

in details of the reports that will be produced. This includes

the written descriptions of how users collect and prepare

data, obtain approvals, complete forms, retrieve data, and

perform other non-technical tasks associated with HRIS use.

Step 5. Vendor analysis: This step determines what

hardware and software are available that will better meet

the organization’s needs for the lowest price. The result of

this analysis will determine whether to purchase with whom

at what price level?

Step 6. Package contract negotiation: After a vendor has been selected, the contract has been

negotiated. The contract stipulates the vendors’ responsibilities with regard to software ,

installation, service, maintenance, training and documentation.

Step 7. Training: Training beings as soon as possible after the contract has been signed. First,

the members of the project team are trained to use the HRIS. Towards the end of the

inception of idea

feasibility study

selecting project team

defining requirements

vendor analysis

package contract negotiations

training

tailoring the system

collecting data

testing the system

starting-up

running in parallel

maintenance

evaluation

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implementation, the HR representatives will train managers from other departments in how to

submit information to the HRIS and how to request information from it.

Step 8. Tailoring the system: This step involves making changes to the system to best fit the

needs of the organization. A general rule of thumb is not to modify the vendor’s package,

because modifications frequently cause problems. An alternative approach is to develop

programs that augment the vendor’s program rather than altering it.

Step 9. Collecting data: Prior to start-up of the system, data must be collected and entered

into the system.

Step 10. Testing the system: Once the system can been tailored to the organization’s needs

and the data is entered, a period of testing follows. The purpose of the testing phase is to

verify the output of the HRIS and to make sure it is doing what it is supposed to do. All the

reports should be critically analyzed for accuracy.

Step 11. Starting up: Start- up begins when all the current actions are put into the system and

reports are produced. It is wise to attempt start-up. Though the system has been tested, some

additional errors often start-up.

Step 12. Running in Parallel: Even after the new HRIS has been tested, it is desirable to run the

new system in parallel with the old system for a period of time to examine its accuracy.

Step 13. Maintenance: It normally takes several weeks or even month for the HR people to feel

comfortable with the new system. By this time errors are adjusted and handled.

Step 14. Evaluation: After the HRIS has been placed for a reasonable length of time, the system

should be evaluated for the successful survey in the organizations.

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MODEL OF HRIS

INPUT SUBSYSTEM

HR research subsystem:

It gathers data about various aspects of human resources management such as

job analysis, job evaluation, employee morale, employee absenteeism and

employee turnover.

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HR intelligence subsystem:

It gathers human resources information from external environment both formally

and informally.

OUTPUT SUBSYSTEM

HR acquisition system:

The functions involved in this system are human resource planning, recruitment,

selection and placement.

HR development system:

HRD system requires information about the competencies that are to be

developed among employees.

Appraisal system:

Appraisal involves evaluating an employee’s quality and performance for

devising suitable compensation package training, promotion, demotion etc.

compensation involves determining the incentives, benefits etc.

Compensation management:

It is concerned with designing and implementing total compensation

package. Compensation is referred to as money and other benefits received

by an employee for providing services to his employer like provident fund,

gratuity, insurance scheme and other payment.

HR maintenance system:

HRM system deals with maintaining employees in the organization. It involves

human resource mobility in the form of promotion, demotion, transfer and

separation, caring for employees safely and health and managing stress that

employees may experience at the workplace.

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Industrial relation system:

IRS is concerned with managing good relations between management and

operatives. This involves designing of industrial relations mechanism, managing

employee discipline, redressing employee grievances and managing industrial

disputes.

THREE LEVELS OF HRIS

STRATEGIC

• Economic trends

• Industry forecasts

• Manpower demand forecasts

FUNCTIONAL

OPERATIONS

Training Projects

Manpower planning

Pension fund investments

Internal Reporting

Absentee rates

Human resources accounting

Productivity assessments

External Reporting

Equity monitoring

Vacancy reporting

Health & safety reporting

Benefits programs

Compensation programs

Insurance programs

Employee demographics

Position description

Employee background and

experiences

Performance evaluation and

rewards

Skills inventory

Recruiting

Employee selection

Employee placement

Employee promotion

Assignments matching

DATA APPLICATIONS

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USAGE AND BENFITS OF HRIS

NEED:

Costly exercise:-

Personal records, when kept manually, do not offer up-to-date information at short

notice. It was difficult to make entries. The clerical involved is quite labor-intensive and

costly.

Inaccurate:-

The manual transfer of data from one record to another may increase the chances of

errors.

Fragmentation:-

Information is not available at a central, easily accessible place since records are kept at

different locations.

Difficult to analyze:-

The manual analyzes of data is time consuming and quite often not readily available for

decision making purposes.

When the organization grows in size the manual system fail to offer reliable, accurate

data at short notice.

APPLICATION & UTILITIES:

NEE

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RIS

Personnel

administration

Salary

administration

Leave & absence

recording Skill inventory

HR

planning

Medical

history

Career

planning

Collective

bargaining Recruitment

Performance

appraisal USES

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Personnel administration - It will encompass information about each employee, such

as name address, personal details etc.

Salary administration - Salary review procedure are important function of HRM, a

good HRIS system must be able to perform what if analysis and present the reports of

changes.

Leave and absence recording - Essentially be able to provide comprehensive method of

controlling leave/absences.

Skill inventory - It is also used to store record of acquired skills and monitor the skill

database both employee and organizational level.

Performance appraisal - The system should record individual employee performance,

appraisal data, such as due date of appraisal, scores etc.

Human resource planning - HRIS should record details of the organizational

requirements in terms of positions

Recruitment - Record details of recruitment activities such as cost and method of

recruitment and time to fill the position etc.

Career planning - System must be able to provide with succession plans reports to

identify which employee have been earmarked for which position.

Collective bargaining - A computer terminal can be positioned in the conference room

linked to database. This will expedite negotiations by readily providing up to date data

based on facts and figures and not feelings and fictions.

BENEFITS:

Higher Speed of retrieval and processing of data

Reduction in duplication of efforts leading to reduced cost

Ease in classifying and reclassifying data

Better analysis leading to more effective decision making

Higher accuracy of information/report generated

Fast response to answer queries

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Improved quality of reports

Better work culture

Establishing of streamlined and systematic procedure

More transparency in the system

Employee – Self Management

ADVANTAGES

The four principal areas of HR that are affected by the Human Resource Information System

(HRIS) include; payroll, time and labor management, employee benefits and HR management.

These four basic HR functionalities are not only made less problematic, but they are ensured a

smooth running, without any hitch. A Human Resources Information System (HRIS) thus

permits a user to see online a chronological history of an employee from his /her position data,

to personal details, payroll records, and benefits information.

The advantage of a Human Resource Information System (HRIS) in payroll is that it

automates the entire payroll process by gathering and updating employee payroll data

on a regular basis. It also gathers information such as employee attendance, calculating

various deductions and taxes on salaries, generating automatic periodic paychecks and

handling employee tax reports. With updated information this system makes the job of

the human resource department very easy and simple as everything is available on a

24x7 basis, and all the information is just a click away.

In time and labor management a Human Resource Information System (HRIS) is

advantageous because it lets human resource personnel apply new technologies to

effectively gather and appraise employee time and work information. It lets an

employee's information be easily tracked so that it can be assessed on a more scientific

level whether an employee is performing to their full potential or not, and if there are

any improvements that can be made to make an employee feel more secure.

Employee benefits are very crucial because they help to motivate an employee to work

harder. By using a Human Resource Information System (HRIS) in employee benefits, the

human resource department is able to keep better track of which benefits are being

availed by which employee and how each employee is profiting from the benefits

provided.

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A Human Resource Information System (HRIS) also has advantages in HR management

because it curtails time and cost consuming activities leading to a more efficient HR

department. This system reduces the long HR paper trail that is often found in most HR

divisions of companies and leads to more productive and conducive department on the

whole.

HRIS TRACK

EXAMPLES

WITHOUT HRIS:

• Prepare evaluation forms

• Print and copy them

• Distribute forms to employees

• Employees fill in evaluation

• Evaluation forms personally submitted to HR Manager

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• Re-write results to the computer or file them

• Manual processing of data gathered

• Prepare result sheets

• Print, copy and distribute them to employees

• File all the forms for future use

WITH HRIS:

Define evaluation forms

Online evaluation Entry

One-click access to results

History info captured

Evaluation reports

Strategic Decision making process can take place

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WITHOUT HRIS:

Prepare leave application forms

Print and copy them

Manually maintain employee attendance information daily

Maintain company calendar

Employee applying for leave fills in an application form

Application form personally submitted to Supervisor

Manual check for employee’s leave status history

Supervisor’s approval or rejection

Application form personally submitted to HR manager

Manual update of employee’s personal leave information file

WITH HRIS:

Define company

specific leave admin

processes

Online leave

application form

Online leave

approval/Rejection

History info captured

Leave balance reports

generated by the

system

Saves strategic

resources

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COMPANY ILLUSTRATIONS

SHAW’S SUPERMARKET

The Situation:

Shaw’s Supermarkets is the second largest supermarket chain in New England. With a

workforce of 30,000 located at 180 stores throughout six states, Shaw's HR staff is responsible

for managing employees' personal data. Their employee mix includes approximately 70 percent

part-time employees, consisting of students, senior citizens, second-job part-timers, and career

part-timers. One third of the workforce is made up of union associates, and Shaw's staff

oversees the company's involvement with three unions and six separate contracts (Koven,

2002). In order to help manage the workforce, the HR staff became interested in centralizing its

HR operations.

The Response:

In order to centralize HR operations Shaw’s decided to implement an ESS (employee self-

service) solution. The use of self-service applications creates a positive situation for HR. ESS

gives HR more time to focus on strategic issues, such as workforce management, succession

planning, and compensation management, while at the same time improving service to

employees and managers, and ensuring that their data is accurate. With this solution,

employees have online access to forms, training material, benefits information and other

payroll related information.

The Outcome:

Shaw’s has had positive feedback since implementing the ESS solution. "The reaction from our

employees has been extremely positive," Penney, VP of Compensation and Benefits, says. "We

even had a significant increase in our medical coverage costs, and it was almost a non-issue

because the online enrollment featured the plan choices, the employee cost, and the company

subsidy. An employee self-service application makes it very easy for them to understand their

contributions and coverage options. I received several e-mails from employees saying this was a

great change and how easy ESS was, which the case is not often when employees are selecting

their benefit options." (Koven, 2002). By giving the employees more access to their information

they are able to see the benefit choices available to them. Employees are also able to update

their information online, which helps reduce the paperwork of the past. Shaw’s has also seen

improvement in productivity because employees are updating information at home, not during

work hours.

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AMERIPRISE FINANCIAL

The Situation:

The Department of Justice survey estimates that 3.6 million U.S.

households were victims of identity theft in 2004. Trafficking in personal date goes beyond U.S.

borders: the New York Times reports that stolen financial information is often distributed

among participants of online trading boards, and the buyers are frequently located in Russia,

Ukraine, and the Middle East. One reason clients are concerned about data security is the

widespread publicity generated by breaches at financial services firm. In late December 2205,

an Ameriprise Financial employee’s laptop that contained unencrypted data on approximately

230,000 customers and advisors was stolen from a car. Other financial services firm, including

Citigroup and Bank of America, also acknowledge large-scale customer data losses in 2005.

President of NCS, Rita Dew, a compliance consulting firm in Delray Beach, Florida, says that the

Securities and Exchange Commission requires investment advisors to have policies and

procedures that address the administrative, technical, and physical safeguards related to client

records and information.

The Response:

Ameriprise Financial had to fight back and had to implement “layers of protection.” It is

important for employees who their primary business computer, and employees regularly

transport the computer between home, office, and meeting sites. The vulnerability of this

arrangement and the need for a safety software program is much needed.

The Outcome:

Employees who are transporting lab tops should install the Steganos Security Suite on their

computer. This software allows employees to create an encrypted virtual drive on the laptop

that serves as data storage safe. Employees stores all client related data and tax preparation

software database on the encrypted drive, which employees has set up with one gigabyte of

storage space. The best thing is that when an employee turns off the computer the information

is stored “safe”, the software automatically encrypts the virtual drive’s data. The software also

generates encrypted backup files, which employees store on CDs in a fireproof safe. This should

keep the data secure if any employee’s laptop is stolen or if the drive is removed from the

laptop. Other financial advisors are relying on encryption both in and out of the office. Other

programs that are being used to protect client’s information are RAID Level 1 system to store

data on the drives that are encrypted with WinMagic’s SecureDocs software. Encryption

ensures that anyone who steals the computer will be absolutely unable to read the data, even

by connecting it to another computer as a “slave drive. This has given many financial advisors

the greatest peace of mind.

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TERASEN PIPELINES

The Situation:

Terasen Pipelines is a subsidiary of Terasen Inc. located in Vancouver, Canada and is located in

several provinces and U.S. states. In 2001 the company changed its headquarters to Calgary to

be closer to the oil. With the big move, the company went through a growth spurt. With the

company in many different locations and the growing numbers of employees, the HR

department saw a need to find a new system to keep more accurate records.

The Response:

In the past Terasen had kept records on paper and with spreadsheets and with the growth of

the company, this system does not work as well as in the past. In order to compensate for

future growth, Terasen began to look into HRIS companies to help with the HR operations. After

researching different companies, Hewitt’s application service provider model with eCyborg was

found to be the right fit.

The Outcome:

Although there was difficulty adapting to a new way of recordkeeping, Terasen was able to find

a system that will help support the current and future growth of the company. Fortunately,

some of the HR staff had experience working with an HRIS and were able to help their

colleagues imagine new processes, as aided by a system. One theme often voiced throughout

this process was: "You guys don't know how hard we're working when we can make it so much

easier with a system that could do a lot of this for us. You don't always have to run to the

cabinet for the employee file just to get basic information. It can all be at your fingertips." (Vu,

2005). In order to help Terasen ease the HR burden of implementing a new HR system, the

management of Terasen was convinced to look for a vendor to help implement and maintain a

HRIS system. This system has helped Terasen better prepare for current and future growth.

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LIMITATIONS

It can be expensive

Its effective application needs large-scale computer literacy among the employees responsible

for maintaining HRIS.

Absence of continuous up-dating of HRIS makes the information stale.

Thorough understanding of what constitutes quality information for the user.

Computer systems are only as good as the data they have to work with, so if a public agency or

company starts out with bad information, there's not much a new system can do about it.

Small firms are internally incapable of HRIS applications and hence they need the help of

external resources.

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CONCLUSION

HRIS is considered a strategic way to develop a new philosophy towards the way in which

people are managed in an organization. Many decision making strategies are based on HR

analysis, which is used to determine whether current HR capabilities are congruent with the

desired organisational objectives. The development of HRIS applications that cater to the needs

of human resources is very important. From a broader perspective, an HRIS yields a well

managed business with better informed employees. The implementation of HRIS applications

results in two benefits:

a) Efficiency of operations and streamlined HR administration.

b) Effectiveness when management can spend more time in decision-making and strategic

planning, and less time on information input and day-to-day HR administration.

In summary, this report has revealed the following:

By automating Human Resource practices, HRIS saves time and money, effectively

reallocates work processes and thus provides competitive advantage and adds strategic

value to the organization.

HR managers must make use of HRIS to achieve improved performance and removing

routine administration allows them to become professional consultants to the rest of

the organization.

Comprehensive HRIS provides the needed information within the shortest period and at

reduced cost.